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With MLSE ownership and teams in flux, Keith Pelley will have hands full in new role

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  • With MLSE ownership and teams in flux, Keith Pelley will have hands full in new role

    Under the ownership agreement, the two telecom partners have the right to buy out Tanenbaum by July 2026, according to sources, and are expected to do exactly that.

    Bell and Rogers initially challenged Tanenbaum over the sale of a portion of his stake to OMERS for $400 million. The deal pushed MLSE’s valuation to $8 billion, meaning Tanenbaum would be owed more money when he exits.

    As it stands now, Tanenbaum could pocket an additional $1.6 billion for his remaining 20-per-cent stake of MLSE, which will likely go a long way towards funding his recently announced Kilmer Sports Ventures, an investment fund which — in theory — gives Tanenbaum a vehicle to compete in the same space that MLSE has long operated without any local competition.

    “I think it’s 100 per cent [Bell and Rogers] will buy out Larry,” one source said of the likelihood of Tanenbaum leaving by 2026. Should it come to pass, it will end Tanenbaum’s run as the single constant at MLSE since it was founded and the lone island of individual ownership in what has always been an ocean of corporate money, from banks to pension funds to telecom giants. It will also see two of Canada’s biggest business rivals have a 50-50 share in one of its most public-facing brands with no third party to act as a buffer or tie breaker or public face.
    “Keith is a great choice [as MLSE president]. He’s likeable, experienced, dynamic — he’ll do a great job, but the best coach in the world can’t fix a divided locker room.”

    Pelley has already made his presence felt. On March 9, three weeks prior to his official start date, he attended Toronto FC’s home opener, a 1-0 victory over Charlotte FC. Since it was an afternoon affair, he flew to Montreal to watch the Maple Leafs beat the rival Canadiens 3-2 that same night. Pelley joined the team on the charter flight home and, according to several sources, went for dinner with team president Brendan Shanahan in the ensuing days.

    On Monday — the day prior to his official start date — Pelley attended Raptors practice at the OVO Athletic Centre, conferring with Raptors president and vice chairman Masai Ujiri and general manager Bobby Webster as they watched injured franchise star Scottie Barnes go through a workout as they play out the string in what has turned into a rebuilding season that will end with the Raptors’ third spin through the NBA Draft lottery in the past four years.
    One of the pressing questions will be how a change in ownership would affect Ujiri, who prior to the Raptors’ recent struggles had led them to nearly a decade of unprecedented success — culminating in the 2019 NBA championship — since arriving in 2013. Through it all, Ujiri could rely on nearly unequivocal support from Tanenbaum.

    Tanenbaum’s future with the organization was an issue that — per sources — was a concern during Ujiri’s drawn-out contract negotiation with MLSE that culminated with Ujiri signing a five-year contract in the summer of 2021 that makes him one of the highest-paid executives in North American sport. At the time, Ujiri pledged that he was going to be with the Raptors for the foreseeable future. The term of his deal? “Forever, man. Forever … I’m home, man. This is it.”

    But that commitment will get road tested sooner than later given that Ujiri’s contract runs through June 30, 2026, aligning him almost exactly with Tanenbaum’s possible departure.
    According to a previous report in the Toronto Star, Edward Rogers was the holdout during the negotiation for Ujiri’s current deal in the summer of 2021, refusing to sign off on a five-year contract that pays Ujiri $15 million annually and includes incentives tied to the Raptors franchise value among other benefits. Eventually, Tanenbaum had to use his status as MLSE chairman to break the stalemate. In the fallout, there was considerable tension between Ujiri and Rogers, although according to multiple sources, much of that has blown over and the relationship is now amicable. “The only issue was price. It wasn’t [personal]. It was, ‘is [Ujiri] really the most valuable sports executive in the world?’” While Shanahan’s negotiation never got as public or seemingly intense, there were similarly some challenging moments, per sources, but they were characterized as ‘fair’ in the end.
    Seeing that Tanenbaum has already began selling down his shares, it would seem unlikely that he could find a way to reverse the field and become the controlling shareholder of MLSE, but under-estimating him has never been a good idea.

    “A lot of people think it’s done, Larry’s gone [from MLSE] but I’m not sure that’s the case,” said one sports industry figure familiar with the situation. “I don’t see Larry going quietly. People seem to think the story is written and I just don't. Larry is smart, Larry's, connected, Larry has money, and he knows how to raise money. We'll see how it all plays out. Yeah, there's the contract and there's the agreement, and then there’s what will actually happen in reality. Are they all the exact same thing in this one? We’ll see.”
    thought it deserved it's own thread

    With MLSE ownership and teams in flux, Keith Pelley will have hands full in new role (sportsnet.ca)
    Only one thing matters: We The Champs.

  • #2
    I can't recall, how the hell did Bell and Rogers both get significant stakes? And whenever one held more than the other, why didn't they get first right of refusal over any sale to maintain their majority? This 50/50 is a recipe for disaster.

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    • #3
      G______Deane wrote: View Post
      I can't recall, how the hell did Bell and Rogers both get significant stakes? And whenever one held more than the other, why didn't they get first right of refusal over any sale to maintain their majority? This 50/50 is a recipe for disaster.
      Ontario Teachers pension plan sold their 80% share of MLSE to the partnership in 2012. IMO, it's been the opposite of disaster. OTPP's goal when they owned it was pure profit making, and rightly so.
      If we knew half as much about coaching an NBA team as we think, we"d know twice as much as we do.

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      • #4
        3inthekeon wrote: View Post

        Ontario Teachers pension plan sold their 80% share of MLSE to the partnership in 2012. IMO, it's been the opposite of disaster. OTPP's goal when they owned it was pure profit making, and rightly so.
        No the disaster would be going forward with Bell and Rogers at 50/50 and no one standing in between.

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        • #5
          G______Deane wrote: View Post

          No the disaster would be going forward with Bell and Rogers at 50/50 and no one standing in between.
          Why would it be a disaster?
          If we knew half as much about coaching an NBA team as we think, we"d know twice as much as we do.

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          • #6
            3inthekeon wrote: View Post

            Why would it be a disaster?
            Yeah I don't get this.

            It's like if ESPN and Fox Sports Co owned a team. That's deep pockets with every incentive in the universe to be as good as possible. They need to draw eyeballs to the TV which means field a good team. A lot of nba owners could care less if they win they just want the profit sharing.

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            • #7
              Primer wrote: View Post

              Yeah I don't get this.

              It's like if ESPN and Fox Sports Co owned a team. That's deep pockets with every incentive in the universe to be as good as possible. They need to draw eyeballs to the TV which means field a good team. A lot of nba owners could care less if they win they just want the profit sharing.
              Yeah it wasn't so much a disaster before Bell and Rogers, but the bottom line was the most important. No coincidence the OVO wasn't built until they got involved.

              I could just imagine someone asking the OTPP a couple of years earlier for $30 million to build a practice facility. Be like talking to AI - "Practice? $30 million and you're not even talking games, you're talking practice?"
              If we knew half as much about coaching an NBA team as we think, we"d know twice as much as we do.

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              • #8
                3inthekeon wrote: View Post

                Why would it be a disaster?
                Potential issues with corporate governance. How do you break deadlocks? Who has the casting vote on major decisions - an independent board member? Remember, these companies are rivals in their markets.

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                • #9
                  golden wrote: View Post

                  Potential issues with corporate governance. How do you break deadlocks? Who has the casting vote on major decisions - an independent board member? Remember, these companies are rivals in their markets.
                  Those are possible concerns, yes. Disaster though? Yeah, I'm fully aware of them being rivals, but they've co-existed at MLSE for 10 years now. They're not going to kill the goose that's laying them golden eggs,
                  If we knew half as much about coaching an NBA team as we think, we"d know twice as much as we do.

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                  • #10
                    3inthekeon wrote: View Post

                    Those are possible concerns, yes. Disaster though? Yeah, I'm fully aware of them being rivals, but they've co-existed at MLSE for 10 years now. They're not going to kill the goose that's laying them golden eggs,
                    They did, but not on 'equal' basis like right now.

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                    • #11
                      3inthekeon wrote: View Post

                      Those are possible concerns, yes. Disaster though? Yeah, I'm fully aware of them being rivals, but they've co-existed at MLSE for 10 years now. They're not going to kill the goose that's laying them golden eggs,
                      Yeah, I wouldn’t go all the way to disaster. But it’s pretty easy to see how and why things could unravel quickly.

                      Or… both parties could be united on prioritizing greed over winning, without Tanenbaum holding the balance of power and caring about the team.

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                      • #12
                        Greed is winning. How many people are watching Raptors games now?
                        If we knew half as much about coaching an NBA team as we think, we"d know twice as much as we do.

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                        • #13
                          would be a mistake to let rogers and bell take over, huge mistake that would set this franchise back 2 decades

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                          • #14
                            3inthekeon wrote: View Post

                            Why would it be a disaster?
                            Look at it even as sponsorship not ownership and these two companies always ask for exclusives and if they owned a minority stake with a private owner, normally would negotiate first right of refusal for any future share sale.

                            They would both want their logos front and centre, both want to be seen as the main owners, both want their share price reflected in any team success etc.

                            What about if one 50% company wanted to drop 100M into stadium renos but the other didn't (all expenses would be pro-rata) or cap team salaries at 150M or wanted more input to sign player X or fire the GM etc etc etc

                            The Bell and Rogers guys hate each other, you think they're just going to be totally hands off and let the club run itself? Tannenbaum is the foil.

                            Maybe Pelley is the new guy to stand in the middle?
                            Last edited by G______Deane; Thu Apr 4, 2024, 11:08 PM.

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                            • #15
                              3inthekeon wrote: View Post
                              Greed is winning. How many people are watching Raptors games now?
                              Greed could take different forms: investing to generate more revenue through winning or cost cutting measures to remain profitable with a losing team. Let’s hope it’s the former. Maple Leafs chose the latter route for decades in the pre-MLSE era and fans still packed the arena.

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